Illinois General Assembly - Full Text of HB6556
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Full Text of HB6556  93rd General Assembly

HB6556 93RD GENERAL ASSEMBLY


 


 
93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
HB6556

 

Introduced 2/6/2004, by Roger L. Eddy

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Motor Fuel Fair Marketing Practices Act. Provides protection against predatory pricing and fuel price gouging in the retail motor fuel industry. Prohibits the sale of motor fuel below the point that the retailer earns a 6% gross margin on the pump price, unless the retailer can demonstrate that the motor fuel was not sold below cost. Prohibits the sale of motor fuel, following times of national disaster or State emergency, that is above the point that the retailer earns a gross margin on the price of 6% plus 19 cents per gallon above the retailer's actual costs of selling motor fuel. Prohibits government subsidies for the development of motor fuel facilities and facilities with motor fuel when the facilities are in the same market area as existing motor fuel facilities. Establishes the Motor Fuel Cost Review Board. Provides for a complaint handling process, permitting the Department of Revenue or the Attorney General to investigate and take action against retailers of motor fuel engaged in violations of fuel price gouging and for repeated offenses of below cost selling. Provides for a private right of action between retailers. Provides that persons engaged in commerce with the State who sell or offer to sell motor fuel shall maintain records accurately indicating the date and the time of day of each change in the sale price of motor fuel and the identity of the person who recorded the price change. Provides that the Illinois Department of Revenue shall have certain powers and duties to investigate and enforce the provisions of the Act. Provides that information obtained by the Department of Revenue, the Attorney General, or the State's Attorney in the course of an investigation under the Act, including information from a person who responds to the investigation and designates the information as confidential, must be maintained as confidential until the investigation is completed and a course of action is determined.


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A BILL FOR

 

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1     AN ACT concerning business practices.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 1. Short title. This Act may be cited as the Motor
5 Fuel Fair Marketing Practices Act.
 
6     Section 5. Legislative findings; purpose.
7     (a) Retail marketing of motor fuel is affected by the
8 public's interest.
9     (b) Consumers benefit from ample numbers of conveniently
10 located motor fuel facilities and ample storage of motor fuels
11 to readily accommodate consumer demand.
12     (c) Local communities benefit from motor fuel businesses
13 owned and operated by independent retailers and wholesalers,
14 because independents generally support private sector
15 businesses that are local or regional in nature, including but
16 not limited to, lenders, insurance providers, providers of
17 accounting services, and providers of legal services.
18     (d) Communities also benefit from financial, equipment,
19 and manpower support from independent retailers and
20 wholesalers for not-for-profit organizations operating within
21 such communities.
22     (e) Despite actual differences in motor fuel production and
23 quality, motor fuel is considered largely to be a "commodity
24 product", with price having evolved as the primary basis of
25 competition.
26     (f) With price as the primary basis of competition, profit
27 margins and returns on investment for retail marketers of motor
28 fuel are generally low and most retailers of motor fuel must be
29 competent in order to survive.
30     (g) Retail marketers of motor fuel must earn a margin of
31 profit on the sale of motor fuel for reinvestment in the
32 business because many motor fuels are flammable and combustible

 

 

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1 liquids, that must be distributed in a safe manner, utilizing
2 specially designed and costly explosion-proof equipment.
3     (h) Retail marketers of motor fuel must earn a margin of
4 profit on the sale of motor fuel for maintenance and
5 reinvestment in the business because motor fuels are
6 potentially hazardous to the underground environment, such
7 that specially designed and costly equipment must be used to
8 contain and monitor the containment of motor fuels, and to
9 comply with governmentally-imposed regulations.
10     (i) Over the years, the margin of profit earned on the sale
11 of motor fuel has lessened, largely due to the advent of
12 self-service as well as the sharing of costs of motor fuel
13 retailing with the retailing of other goods and services
14 offered at the motor fuel facility, including but not limited
15 to, the sale of convenience store goods and services, car
16 washes, and fast-foods, where the shared costs can include
17 cashiering, management, accounting, facility maintenance,
18 facility development, land acquisition, and land development.
19     (j) Given today's cost of doing business and the average
20 volume motor fuel station facility, the sharing of personnel to
21 accommodate transactions of both convenience store items and
22 motor fuel sales has allowed for a significant reduction in the
23 minimum needed profit margin on a motor fuel operation
24 benefiting from cost sharing as compared with a motor fuel
25 operation not benefiting from such cost sharing.
26     (k) A lower margin of profit on the sale of motor fuel has
27 been a gain to consumers through lower retail prices on motor
28 fuel, which for many years has allowed the majority of
29 competently-run independent businesses to remain financially
30 viable because of cost sharing.
31     (l) In recent years, however, the profit earned on the sale
32 of motor fuel within a growing number of markets has gone below
33 what is reasonable and necessary for an independent marketer to
34 cover its costs of doing business, even when the motor fuel
35 marketer is benefiting from cost sharing.
36     (m) The primary reason that the profit earned on the sale

 

 

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1 of motor fuel has gone below what is reasonable and necessary
2 for a cost-sharing retailer to cover its costs of doing
3 business is the growing practice of below-cost marketing of
4 motor fuels.
5     (n) With price as the number one basis of competition in
6 the retailing of motor fuel, below-cost retailing by the
7 competition leaves the independent retailer of motor fuel with
8 only two choices: (1) join in the below-cost retailing of motor
9 fuel to keep its customer base, which will eventually cause the
10 independent retailer to become financially unsound and not
11 competitive because it cannot generate capital to reinvest in
12 its business; or (2) do not join in the below-cost retailing of
13 motor fuel, and lose customers and sales volumes as a result,
14 eventually becoming financially unsound and not competitive
15 through the inability to generate reinvestment capital. Either
16 way, many independent retailers will be selling out or closing
17 up.
18     (o) Those who initiate below-cost marketing of motor fuel
19 are able to do so either from subsidized pricing unrelated to
20 cost-sharing or from wholesale price discrimination.
21     (p) Subsidized pricing stems from one of the following 4
22 sources:
23         (1) A retailer covers its losses on the sale of motor
24     fuel from profits generated by the sales of products and
25     services unrelated to the retail sale of motor fuels and
26     unrelated to the sharing of personnel and other costs
27     involved in the sales of motor fuel products. Examples
28     include, but are not necessarily limited to, bulk
29     distributors of motor fuel, supermarket operators and mass
30     merchandiser retailers who have added motor fuel as an
31     additional, separate product offering, and who provide
32     motor fuel discounts and subsidize motor fuel operations
33     with revenue generated on separate operations, as well as
34     those involved in money laundering and illegal trade. This
35     form of subsidization is referred to as "subsidization via
36     revenue sharing from diversification".

 

 

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1         (2) Large chain retailers who cover a large geographic
2     market and subsidize their below-cost sales in one market
3     with profits generated in other markets. This form of
4     subsidization is referred to as "subsidization via revenue
5     sharing from geographic dispersion".
6         (3) Vertically integrated companies that subsidize the
7     retailing end of the business from either the wholesaling,
8     transportation, refining, and oil production portions of
9     their business. This form of subsidization is referred to
10     as "subsidization via revenue sharing from vertical
11     integration".
12         (4) Foreign nationals who receive subsidies from
13     abroad in order to maintain business and citizenship
14     opportunities in the United States. This form of
15     subsidization is referred to as "subsidization via revenue
16     sharing from foreign sources".
17     (q) Wholesale price discrimination occurs when refiners or
18     other originators of motor fuel sell to one wholesaler or
19     retailer in a market area at an advantaged price over another
20     wholesaler or retailer in the same market area, when the
21     pricing differential is not cost-justified.
22     (r) Below-cost marketing of motor fuel is unfair
23     competition because it injures and threatens the viability of
24     independent motor fuel marketers, even those possessing the
25     highest degree of competence and who are engaging in
26     cost-sharing by way of diversified retail operations, by
27     depriving independent motor fuel marketers of their ability to
28     accumulate capital, which is essential in a capitalistic
29     economy, and which is essential for reinvestment in the motor
30     fuel operation.
31     (s) The inability of independent motor fuel marketers to
32     accumulate capital, due to unfair competition in the motor fuel
33     industry, also damages local and regional suppliers of
34     equipment, facilities, technology, and other goods and
35     services with whom independents regularly do business, all to
36     the detriment of local and regional economies.

 

 

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1     (t) Unfair competition in the retail motor fuel industry
2     also injures the ability of independent motor fuel marketers to
3     generate money to cover the costs of regulation compliance
4     related to underground storage tank systems, potentially
5     endangering the environment.
6     (u) Unfair competition in the retail motor fuel industry
7     also injures the ability of local independent retailers to
8     provide new jobs, expand career opportunities for their current
9     employees, implement new technologies, raise living standards
10     for their employees, and enhance the overall economic welfare
11     of their local communities and region.
12     (v) Unfair competition in the retail motor fuel industry
13     also adversely affects the State because it adversely affects
14     business spending by independent marketers in the high-wage
15     sectors of construction, manufacturing, and technology, and it
16     adversely affects the revenue-generating abilities of the
17     state through lower sales and income tax collections.
18     (w) Below-cost marketing of motor fuel is inherently
19     predatory and stands to injure competition and reduce the
20     number of competitors in petroleum marketing, especially the
21     number of independently owned marketers, to the detriment of
22     the consuming public welfare by limiting the number of motor
23     fuel retail outlets available to State motorists, and by making
24     motorists susceptible to increased retail prices long-term.
25     (x) Unfair competition by way of the predatory practice of
26     below-cost pricing also tends to create barriers to entry or
27     re-entry into the motor fuel marketplace by independent motor
28     fuel marketers, resulting in a marketplace that is not truly
29     free.
30     (y) While the federal government has regulations dealing
31     with predatory pricing, the regulations fail to protect
32     businesses and consumers because the regulations are not held
33     to be violated until long after the damage caused by predatory
34     pricing has been done, with much of the damage (i.e. bankrupt
35     and closed family and other independent businesses) being
36     irreversible.

 

 

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1     (z) Federal regulations also fail to take into account the
2     unique circumstances associated with the retail motor fuel
3     industry, including but not necessarily limited to the
4     following:
5         (1) There is a barrier to entry into the motor fuel
6     market on the basis of product differentiation because
7     motor fuel is perceived largely as a commodity product,
8     where product differentiation is small and price is the
9     number one basis of competition, providing little for the
10     independent motor fuel marketer to do on a strategy of
11     differentiation.
12         (2) The high investment cost required to enter the
13     motor fuel industry (with the average cost for fuel
14     improvements and fuel equipment running approximately
15     $300,000 and the cost for land, land development, and
16     improvements and equipment for cost-sharing running as
17     much as $900,000, for a total entry cost being as much as
18     $1.2 million depending on the geographic area of the
19     State), requires those entering into the motor fuel
20     business to have a reasonable opportunity to earn a
21     positive return on investment.
22         (3) The threat of continued or repeated predatory
23     pricing practices, creates a significant barrier to
24     re-entry into the business by those previously run out of
25     business, as well as a significant barrier to entry by
26     those wanting to enter the market for the first time.
27     (aa) On the other end of the spectrum, in the past,
28     following times of national crisis, an isolated number of motor
29     fuel retailers have engaged in price gouging, which has served
30     to exacerbate the crisis by stimulating public panic over the
31     purchase of motor fuel.
32     (bb) Competent independent motor fuel marketers (dealers,
33     distributors, jobbers, and wholesalers) are vital to a healthy,
34     competitive marketplace, and are important to the economic
35     viability of the State and its local communities.
36     (cc) While retailers of motor fuel should not be guaranteed

 

 

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1     a financial net profit from the marketing of motor fuel,
2     retailers of motor fuel also should not be guaranteed a
3     financial net loss from the marketing of motor fuel.
4     (dd) Consumer protection and protection of honest
5     businesses are both important to the economic viability of the
6     State and local communities.
7     (ee) The General Assembly declares that there is a need for
8     public policy that is balanced between the needs of consumers
9     and of businesses, and that demonstrates care and concern for
10     both consumers and those businesses that serve consumers.
11     (ff) The General Assembly declares that there is a need for
12     public policy based on protection through prevention;
13     protection of competently run, diversified, cost-sharing motor
14     fuel retailers through the prevention of pricing that is
15     predatory; and protection of consumers through the prevention
16     of the lessening of competition (resulting from the elimination
17     of competent retailers of motor fuel), and through the
18     prevention of pricing that is gouging following times of
19     national crises and State emergencies.
20     (gg) The General Assembly declares that there is a need for
21     public policy to set a floor below which the retail price of
22     motor fuel shall not be set, unless the motor fuel marketer can
23     demonstrate that the price of motor fuel, below the floor, is
24     not below its retail selling cost of such motor fuel, or unless
25     the motor fuel marketer can demonstrate that it is meeting the
26     equally low price of a competitor, thereby allowing retail
27     motor fuel prices to be set by those who are able to establish
28     the lowest cost of selling motor fuel.
29     (hh) The General Assembly further declares that there is
30     also a need, during times of national disaster or State
31     emergency, for public policy to set a ceiling above which the
32     retail price of motor fuel shall not be set, unless the motor
33     fuel marketer can demonstrate that the price of motor fuel,
34     above the ceiling, is necessary to cover its costs of doing
35     business.
36     (ii) In order to provide the most simplicity in determining

 

 

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1     when a motor fuel marketer is or is not in compliance with this
2     Act, and to also eliminate the need for rules and regulations
3     governing wholesale price discrimination, transfer pricing,
4     and related issues involved in the subsidization of motor fuel
5     at retail from a vertically integrated motor fuel marketer, the
6     General Assembly declares that there is a need for a neutral
7     guideline on which to base fuel prices for the purpose of
8     determining if below-cost pricing or price-gouging is
9     occurring.
10     (jj) The General Assembly declares Oil Price Information
11     Service (OPIS) as the neutral guideline on which to base fuel
12     prices for the purpose of determining if below-cost pricing or
13     price-gouging is occurring. OPIS is a publication that is used
14     as a benchmark by the world to buy and sell U.S. gasoline and
15     diesel fuel. OPIS has no stake in fuel transactions, is not
16     funded by oil industry initiatives, and strictly adheres to
17     antitrust guidelines determined by independent legal counsel.
18     (kk) Because a motor fuel marketer shall be allowed to meet
19     the equally low price of another motor fuel marketer, there
20     must be a mechanism that provides for the periodic restoration
21     of pricing of motor fuel to a level that is not below cost.
22     (ll) Below-cost selling laws have been effective in other
23     states in protecting competent independent and small-business
24     retailers and wholesalers from subsidized, below-cost pricing.
25     The purpose of this Act is to substantially lessen subsidized
26     pricing of petroleum and related products, while still allowing
27     the reduction of motor fuel pricing through cost-sharing over
28     the sales of other products and services, where cost-savings
29     are the result of sharing personnel and other relevant cost
30     factors in motor fuel retailing, including sales, management,
31     maintenance, accounting, and property costs.
32     (mm) This Act provides that the advertising, offering for
33     sale, or sale of motor fuel below cost or at a cost lower than
34     charged other persons in the same marketing area is necessarily
35     done with the intent of injuring competitors or destroying or
36     substantially lessening competition, and is an unfair and

 

 

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1     deceptive trade practice. The policy of the State is to promote
2     the general welfare through the prohibition of such sales. The
3     purpose of this Act is to carry out that policy in the public
4     interest, providing for exceptions under stated circumstances,
5     providing for enforcement and providing penalties.
6     (nn) Because motor fueling constitutes one of the most
7     competitive industries in the marketplace, it is important that
8     one motor fuel marketer not be advantaged over another motor
9     fuel marketer as a result of any type of governmental subsidy;
10     therefore, the development of a motor fuel facility, or the
11     development of a facility that has, as a part thereof, a
12     facility for the sale of motor fuel, should not be
13     government-subsidized when such facility would be in
14     competition with another such facility in the same market area.
15     (oo) It is believed that the costs of ensuring compliance
16     with and enforcing this Act will be more than offset by the
17     additional sales and income tax revenues stemming from said
18     compliance and enforcement.
 
19     Section 10. Definitions. In this Act:
20     "Actual costs of selling motor fuel" means any costs and
21 expenses reasonably incurred by a retailer of motor fuel
22 associated with the selling of motor fuel at a retail motor
23 fuel facility, including the costs and expenses defined in this
24 Act (the applicable laid-in cost of motor fuel, plus expense
25 costs of selling motor fuel, plus investment costs of selling
26 motor fuel, plus costs and expenses excluded from expense costs
27 of selling motor fuel, plus extraordinary costs of selling
28 motor fuel, plus other costs reasonably incurred).
29     "Actual costs of selling motor fuel from dedicated
30 supplier" means any costs and expenses reasonably incurred by a
31 retailer of motor fuel associated with the selling of motor
32 fuel at a retail motor fuel facility, including the applicable
33 laid-in cost of motor fuel originating from dedicated supplier,
34 plus expense costs of selling motor fuel, plus investment costs
35 of selling motor fuel, plus costs and expenses excluded from

 

 

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1 expense costs of selling motor fuel, plus extraordinary costs
2 of selling motor fuel, plus other costs reasonably incurred).
3     "Actual costs of selling motor fuel per gallon" means the
4 actual costs of selling motor fuel, divided by the number of
5 gallons sold, during the period in which motor fuel was sold.
6     "Actual costs of selling motor fuel per gallon from
7 dedicated supplier" means the actual costs of selling motor
8 fuel from dedicated supplier, divided by the number of gallons
9 sold, during the period in which motor fuel was sold.
10     "Actual health insurance costs" means the health insurance
11 costs, if any, actually incurred.
12     "Advertising expenses" means the following forms of
13 advertising: newspaper, Internet, magazine, television, radio,
14 direct-mail, billboard, and other forms of off-premises
15 advertising related to motor fuel.
16     "Affiliate" means an entity that owns or controls, or is
17 owned or controlled by, another person, whether through stock
18 ownership or otherwise.
19     "Average monthly gallons of motor fuel sold" means the
20 mathematical result obtained by dividing the total number of
21 gallons of motor fuel sold at a given retail motor fuel
22 facility over the 12 months preceding the date in question, by
23 the number of months that motor fuel was sold over the 12-month
24 period.
25     "Below cost sale", "below cost selling", "selling below
26 cost", "to sell below cost", and "sell below cost" means the
27 selling of gasoline or No. 2 low sulfur clear diesel fuel at
28 retail in the State at a price, excluding sales taxes and other
29 taxes or fees imposed by the government on the sale of the fuel
30 at the pump, that is below the sum of the following: the
31 applicable laid-in cost of motor fuel, plus any and all
32 governmentally imposed taxes or fees on the sale of the motor
33 fuel at the pump, plus the lower of: (1) a positive gross
34 margin on the motor fuel sale (before non-product costs and
35 expenses) to the retailer of 6% of the retail pump price of the
36 motor fuel (also referred to as the regulated minimum retail

 

 

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1 cost price of motor fuel sold), or (2) the mathematical sum of
2 the applicable laid-in cost of motor fuel plus the cost of
3 selling the motor fuel at retail on a per gallon basis.
4     "Competition" means the vying for motor fuel sales between
5 any 2 persons selling motor fuel in the same market area at the
6 same level of distribution.
7     "Competitor" means any person who vies for motor fuel sales
8 against another person in the same market area at the same
9 level of distribution.
10     "Cost of selling motor fuel at retail on a per gallon cost
11 basis" means a per gallon cost determined mathematically by the
12 sum of the following 2 cost items: (1) the mathematical result
13 derived from dividing the expense costs of selling motor fuel
14 at retail during the 24 months before the date in question by
15 the number of gallons of motor fuel sold during the 24 months
16 before the date in question, plus (2) the mathematical result
17 derived from dividing the investment costs of selling motor
18 fuel at retail by the average monthly gallons of motor fuel
19 sold.
20     "Credit card and bank card related expenses" means any
21 costs to the motor fuel retailer associated with accommodating
22 the payment of motor fuel by way of bank and credit card
23 transactions, including but not limited to fixed fees,
24 transaction fees, and network processing fees. In the event
25 that goods and services, other than motor fuel, are sold within
26 the same facility as motor fuel, in the event that the payment
27 of such goods and services are also by way of bank and credit
28 card transactions, and to the extent that any costs associated
29 with accommodating the payment of motor fuel by way of bank and
30 credit cards are not made separate and readily distinguishable
31 from the costs associated with accommodating the payment of
32 non-motor fuel items by bank and credit cards, then the portion
33 of costs not made separate and readily distinguishable that
34 should be allocated as motor fuel related costs shall be
35 determined mathematically as follows: total bank card and
36 credit card related costs incurred by the retailer for the

 

 

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1 applicable retail facility, multiplied by the total dollars
2 associated with motor fuel purchases paid by bank or credit
3 cards at the retail facility, divided by the total dollars
4 associated with total purchases paid by bank or credit cards at
5 the facility.
6     "Dedicated supplier" means a motor fuel supplier of a motor
7 fuel retailer (for the retail facility in question) to which
8 the retailer is contractually committed at the time of the
9 motor fuel purchase by the retailer from the retailer's
10 supplier (for the retail facility in question).
11     "Department of Revenue" and "Department" means the
12 Department of Revenue of the State of Illinois. "Depreciation
13 allowance on fuel equipment" means the original acquisition and
14 installation cost value in all installed fuel equipment
15 (including but not limited to fuel pumps, fuel dispensers, fuel
16 tanks, fuel piping, fuel tank gauge systems, fuel controllers,
17 credit card acceptance devices on the fuel dispensers, fuel
18 distribution boxes, pump access modules, and fuel related
19 signage), divided by a factor of 180 months.
20     "Depreciation allowance on fuel improvements" means, on a
21 monthly basis, the original cost of all fuel improvements
22 (including but not limited to fuel canopy, fuel canopy
23 fixtures, fuel canopy and fuel canopy breezeway fixtures,
24 pavement above the underground storage tanks and piping,
25 pavement below the fuel canopy and canopy breezeway, fuel
26 islands, and fuel related electrical conduit and wiring, fuel
27 kiosk, and that portion of any other building where motor fuel
28 transactions are accommodated), divided by a factor of 240
29 months.
30     "Direct labor costs" means the wages and payroll taxes
31 associated with those personnel directly involved in the sale,
32 delivery, or transfer of motor fuel, including maintenance on
33 motor fuel facilities. Direct labor costs also include
34 workman's compensation, unemployment insurance, imputed health
35 insurance costs, and other human resources costs directly
36 related to such personnel (excluding, actual health insurance

 

 

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1 costs). In the event that goods and services, other than motor
2 fuel, are sold within the same facility as motor fuel, in the
3 event that the personnel directly involved in the sale,
4 delivery, or transfer of motor fuel are also involved in the
5 sale or operations of such other goods and services, and to the
6 extent that the personnel costs associated with motor fuel are
7 not separate and readily distinguishable from the personnel
8 costs associated with non-motor fuel sales and operational
9 activities, then the portion of costs not made separate and
10 readily distinguishable that should be allocated as motor fuel
11 related costs shall be determined mathematically as follows:
12 non-distinguishable direct labor costs multiplied by the total
13 motor fuel sales dollars at the retail facility, divided by the
14 total sales dollars of all products and services (motor fuels
15 sales and non-motor fuel sales).
16     "Disaster" has the meaning given in Section 4 of the
17 Illinois Emergency Management Agency Act.
18     "Expense costs of selling motor fuel at retail" means the
19 mathematical sum obtained by adding the following costs
20 associated with the retailing of motor fuel at a given retail
21 facility: labor costs related to motor fuel sales and
22 management (including applicable direct labor and indirect
23 labor costs), plus credit card and bank card related expenses,
24 plus utilities expenses, plus property taxes, plus insurance
25 expenses, plus maintenance expenses, plus supplies expenses,
26 plus telecommunications expenses, plus inventory losses, plus
27 regulatory compliance costs. Expense costs of selling motor
28 fuel at retail does not include interest on borrowed capital,
29 dividends paid on equity capital, advertising expenses, actual
30 health insurance costs, life insurance costs, or leasing costs
31 (since a substitute for leasing costs is provided by investment
32 costs of selling motor fuel as defined in this Section).
33     "Extraordinary costs of selling motor fuel" means costs
34 other than the costs comprising expense costs of selling motor
35 fuel at retail, other than laid-in cost of motor fuel, and
36 other than the investment costs of selling motor fuel at

 

 

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1 retail, when such costs are not customarily incurred to
2 accommodate the sale of motor fuel at retail. While it is
3 difficult to anticipate what such costs may include, and while
4 what follows is not intended to limit the range of what may be
5 an extraordinary cost, one example would be the costs
6 associated with the placement and running of an electric
7 generator to sell motor fuel during power outages.
8     "Government subsidy" means any State or local governmental
9 money disbursed to develop a facility or to develop the
10 infrastructure contained on property of the facility, as well
11 as any State or local government money foregone by any
12 governmental entity as a result of the development of a
13 facility; such foregone money shall include, but is not limited
14 to, reduced taxes stemming from incremental tax districts and
15 enterprise zones.
16     "Gross margin on motor fuel" means the difference between
17 the retail price of the motor fuel (less taxes and
18 governmentally imposed fees levied on the sale of the motor
19 fuel at the pump) and the product cost of the motor fuel, such
20 product cost defined as the regional Oil Price Information
21 Service (OPIS) average on the previous day for the gasoline
22 grade being sold or for No. 2 low sulfur clear diesel fuel,
23 plus all applicable taxes and governmentally fees levied on the
24 motor fuel purchase by and delivery to the retailer, plus
25 transportation charges to transport the motor fuel from the
26 wholesale point to the retail point.
27     "Imputed health insurance costs" means 75% of the most
28 recent reported average premiums cost for employer-sponsored
29 health insurance coverage, as published by the Henry J. Kaiser
30 Family Foundation (or other authoritative source as selected by
31 the Department), applicable to all specified employees of the
32 motor fuel retailer (except those that have health insurance
33 coverage through an employer group health plan other than his
34 or her retail motor fuel employer) who are working for the
35 motor fuel retailer for 30 or more hours per work week, and who
36 have been employed by the motor fuel retailer for at least 90

 

 

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1 consecutive days working 30 or more hours per work week.
2     "Inadvertent incident" means that the incident can be shown
3 to be not deliberate, but, rather, accidental. Examples of
4 accidental include, but are not limited to, errors or omissions
5 on the part of the retail personnel who change the prices, the
6 failure on the part of clerical personnel to properly enter
7 pricing data into a data processing system, and the failure to
8 include, in computing laid-in cost of motor fuel, the wholesale
9 pricing of a new supplier due to a lack of awareness of such
10 new supplier. Accidental shall not be construed to mean that a
11 person failed to do the computations necessary to ensure
12 compliance with this Act.
13     "Indirect labor costs" means labor costs other than direct
14 labor costs, including but not limited, to supervisory,
15 bookkeeping, and administrative personnel who are indirectly
16 related to the sale, delivery, transfer, or accounting of motor
17 fuel, whether or not such personnel are situated at the motor
18 fuel facility. Indirect labor costs also include workman's
19 compensation, unemployment insurance, imputed health
20 insurance, and other human resources costs directly related to
21 such personnel (excluding actual health insurance costs). In
22 the event that goods and services, other than motor fuel, are
23 sold within the same facility as motor fuel, in the event that
24 the personnel indirectly involved in the sale, delivery, or
25 transfer of motor fuel are also involved in the sale or
26 operations of such other goods and services, and to the extent
27 that the personnel costs associated with motor fuel are not
28 separate and readily distinguishable from the personnel costs
29 associated with non-motor fuel sales or operational
30 activities, then the portion of costs not made separate and
31 readily distinguishable that should be allocated as motor fuel
32 related costs shall be determined mathematically as follows:
33 non-distinguishable indirect labor costs multiplied by the
34 total motor fuel sales dollars at the retail facility, divided
35 by the total sales dollars of all products and services (motor
36 fuels sales and non-motor fuel sales) at the facility.

 

 

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1     "Insurance expenses" means any insurance costs associated
2 with the retail sale of motor fuel, including liability
3 insurance, property insurance, as well as workers
4 compensation, unemployment compensation, and employer's
5 liability costs and expenses on direct and indirect labor,
6 except that insurance expenses does not include actual health
7 insurance costs, imputed health insurance costs, or life
8 insurance costs of direct and indirect labor.
9     "Inventory losses" means losses due to breakage, damage,
10 shrink, or theft.
11     "Investment costs of selling motor fuel at retail" means
12 the mathematical sum obtained by adding land holding costs,
13 plus land development costs, plus depreciation allowance on
14 fuel improvements, plus depreciation allowance on fuel
15 equipment.
16     "Isolated incident" means that the occurrence was
17 exceptional and not generally repeated, unless the cause for
18 repeating was definitely accidental and such accident occurred
19 with the retailer having one or less prior inquiries from the
20 Department of Revenue within 19 months prior to the occurrence,
21 for the facility in question.
22     "Labor costs" means direct labor costs plus indirect labor
23 costs.
24     "Labor costs related to motor fuel sales and management"
25 means the portion of labor costs that are applicable to the
26 sales, management, accounting, and operations of the retailing
27 of motor fuels, including maintaining the cleanliness of and
28 stocking supplies at motor fuel facilities. Since cashiers,
29 managers, accounting, and operations personnel are often
30 involved in the sales of products and services other than motor
31 fuels, a good faith effort must be made to determine the
32 portion of labor costs that should be allocated to the motor
33 fuels operation versus the non-motor fuels operations. Absent a
34 more logical basis, the portion allocated to motor fuel sales
35 shall be mathematically determined by multiplying the total
36 labor costs by the total motor fuel sales dollars, then

 

 

HB6556 - 17 - LRB093 19819 RXD 45562 b

1 dividing this result by the total dollars of all sales in which
2 such personnel are involved (motor fuel and non-motor fuel
3 sales and operations).
4     "Laid-in cost of motor fuel" means the regional OPIS
5 average price per gallon on the previous day for the gasoline
6 grade being sold or for No. 2 low sulfur clear diesel fuel,
7 plus all applicable taxes and governmentally imposed fees
8 applicable to the motor fuel purchase by and delivery to the
9 retailer, plus transportation charges to transport the motor
10 fuel from the wholesale or supply point to the retail point,
11 plus one quarter of a cent per gallon (for ordering and other
12 inventory management costs associated with motor fuel).
13     "Laid-in cost of motor fuel originating from dedicated
14 supplier" means the actual price per gallon charged to the
15 retailer by the retailer's dedicated supplier on the previous
16 day for the gasoline grade being sold or for No. 2 low sulfur
17 clear diesel fuel, plus all applicable taxes and governmentally
18 imposed fees applicable to the motor fuel purchase by or
19 delivery to the retailer, plus transportation charges to
20 transport the motor fuel from the wholesale or supply point to
21 the retail point, plus one quarter of a cent per gallon (for
22 ordering and other inventory management costs associated with
23 motor fuel).
24     "Land holding costs" means the market value of the land
25 occupied by motor fuel facilities (motor fuel facilities
26 consisting of motor fuel improvements and equipment). Since
27 motor fuel facilities will not always occupy all of the land at
28 a site where motor fuel sales take place in conjunction with
29 the sales of other goods and services, the portion of the land
30 that the motor fueling facilities occupy shall be computed to
31 determine the value of the land occupied by motor fuel
32 facilities. The proportional value of such land shall then be
33 multiplied by a factor of 7%, then divided by a factor of 12 to
34 determine the land holding costs per month. In the event that
35 the land is leased, not owned, by the motor fuel marketer, and
36 if the monthly lease dollar amount, for the portion of the land

 

 

HB6556 - 18 - LRB093 19819 RXD 45562 b

1 occupied by the motor fueling facilities, is greater than the
2 proportional value of the land and multiplied by a factor of
3 7%, divided by a factor of 12, then the land holding costs
4 shall be equal to the monthly lease cost on such portion of the
5 land.
6     "Land development costs" means the costs of developing land
7 occupied by motor fuel facilities (motor fuel facilities
8 consisting of motor fuel improvements and equipment). In the
9 event that motor fuel facilities do not occupy all of the land
10 development at a site where motor fuel sales take place in
11 conjunction with sales of other goods and services, the portion
12 of the land development occupied by motor fuel facilities shall
13 be determined mathematically as follows: total costs of
14 developing the land, multiplied by the area, in square feet,
15 occupied by fuel improvements and fuel equipment, as well as
16 the area of driveway entrances and driveways utilized by motor
17 fueling motorists in their ingress to and egress from motor
18 fueling facilities, divided by the total area, in square feet,
19 of the entire developed area of land.
20     "Leasing costs" means lease expenses on land, land
21 improvements, fuel improvements, and fuel equipment. In the
22 event that motor fuel facilities do not comprise all of the
23 land development at a site where motor fuel sales take place in
24 conjunction with the sales of other goods and services, the
25 portion of the land and land improvements occupied by motor
26 fuel retailing shall be determined mathematically as follows:
27 total lease costs of the land, land improvements, fuel
28 improvements, and fuel equipment multiplied by the area, in
29 square feet, occupied by fuel improvements and fuel equipment,
30 as well as the area of driveway entrances and driveways
31 utilized by motor fueling motorists in their ingress to and
32 egress from motor fueling facilities, divided by the total
33 area, in square feet, of the entire developed area of land.
34     "Maintenance expenses" means the maintenance costs
35 associated with fuel improvements, fuel equipment, and land
36 improvements. In the event that motor fuel facilities do not

 

 

HB6556 - 19 - LRB093 19819 RXD 45562 b

1 comprise all of the land at a site where motor fuel sales take
2 place in conjunction with the sales of other goods and
3 services, the proportional cost of maintenance on the land
4 improvements allocable to motor fuel retailing shall be
5 determined mathematically as follows: total maintenance costs
6 on the land and on the land improvements, multiplied by the
7 area, in square feet, occupied by fuel improvements and fuel
8 equipment, as well as the area of driveway entrances and
9 driveways utilized by motor fueling motorists in their ingress
10 to and egress from motor fueling facilities, divided by the
11 total area, in square feet, of the entire area of Land.
12     "Market area" means a distance of 4 miles by road in
13 non-urban areas; a distance of 2.5 miles by road in a standard
14 metropolitan statistical area; and a distance of 60 miles by
15 road for truck stop outlets with more than 60% of fuel sales to
16 vehicles with gross weight of over 50,000 lbs.
17     "Market value of land" means the appraised valuation of the
18 land occupied by a retail motor fueling facility, such
19 appraisal to have been given by a certified, MAI Appraiser
20 sometime within a 48-month period before the date or within the
21 18-month period following the date that such appraisal is used
22 to document land holding costs under this Act.
23     "Motor fuel" means those products upon which the State
24 excise tax levied, or defined, in the Motor Fuel Tax Law, as
25 amended, is imposed.
26     "Oil Price Information Service" (OPIS) means the daily
27 publication containing oil price information that is a widely
28 accepted independent fuel price benchmark for supply.
29     "Person" means any individual, club, firm, association,
30 organization, partnership, business, trust, joint-stock
31 company, company, corporation, or other entity, legal or
32 otherwise.
33     "Price gouging of motor fuel", "price gouging", or "motor
34 fuel price gouging" means the self-service sale of gasoline or
35 No. 2 low sulfur clear diesel fuel at retail in the State at a
36 price greater than the sum of the following: the applicable

 

 

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1 laid-in cost of motor fuel, plus applicable taxes and
2 governmentally imposed fees levied on the sale of the motor
3 fuel at the pump, plus a gross profit margin to the retailer,
4 on the sale of motor fuel at self-service, of the greater of:
5 (1) the regulated minimum retail cost price of motor fuel sold
6 plus 19 cents per gallon, or (2) 19 cents per gallon above the
7 retailer's actual costs of selling motor fuel per gallon at the
8 time the motor fuel was sold. The greater is defined as the
9 "regulated maximum retail cost price of motor fuel sold".
10     "Property taxes" means taxes on land, real estate,
11 improvements, and personal property.
12     "Regional OPIS average price" for an applicable motor fuel
13 station means the average price of all wholesale rack suppliers
14 actively supplying and offering for sale motor fuel within a
15 100-mile radius of the motor fuel station being supplied,
16 excluding, the one highest priced terminal supplier within that
17 100-mile radius. Notwithstanding the foregoing, in the event
18 that there are not at least 3 wholesale rack suppliers actively
19 supplying and offering for sale motor fuel within a 100-mile
20 radius of a motor fuel station being supplied, the radius shall
21 be extended until there are at least 3 such wholesale rack
22 suppliers.
23     "Regulated maximum retail cost price of motor fuel sold" or
24 "regulated maximum price" relates to motor fuel sales at
25 self-service, and means the mathematical sum of the following:
26 the applicable laid-in cost of motor fuel, plus applicable
27 taxes and governmentally imposed fees levied on the sale of the
28 motor fuel at the pump, plus a gross profit margin to the
29 retailer, on the sale of motor fuel at self-service, of the
30 greater of: (1) the regulated minimum retail cost price of
31 motor fuel sold plus 19 cents per gallon; (2) 19 cents per
32 gallon above the retailer's actual costs of selling motor fuel
33 per gallon at the time the motor fuel was sold; or (3) 19 cents
34 per gallon above the retailer's actual costs of selling motor
35 fuel per gallon from dedicated supplier at the time the motor
36 fuel was sold.

 

 

HB6556 - 21 - LRB093 19819 RXD 45562 b

1     "Regulated minimum retail cost price of motor fuel sold" or
2 "regulated minimum price" means the mathematical sum of the
3 following: the applicable laid-in cost of motor fuel, plus all
4 applicable taxes and governmentally imposed fees levied on the
5 sale of motor fuel at the pump, plus a positive gross margin on
6 the sale of the motor fuel (before non-product costs and
7 expenses) to the retailer of 6%.
8     "Regulated period for price restoration" means every
9 Wednesday, during the period of time from 8:30 a.m. to 11:30
10 a.m., whenever the retailer's actual price of motor fuel is
11 less than the retailer's regulated minimum retail cost price of
12 motor fuel sold.
13     "Regulatory compliance costs" means those costs incurred
14 by the motor fuel retailer to comply with regulations governing
15 the storage and sale of motor fuel at a retail facility,
16 including, but not limited to, costs associated with meter
17 accuracy, leak detection of tanks or piping, and corrosion
18 protection of tanks or piping, but only to the extent that such
19 costs are not already included in depreciation allowance on
20 fuel equipment.
21     "Relevant geographic market" means the geographic area of
22 effective competition.
23     "Retailer" means a person engaged in the business of
24 selling motor fuel to a member of the motoring public for
25 consumption.
26     "Sale" or "sell" means a transfer of money or other value
27 or combination, exchange, barter, gift, sale, offer for sale,
28 advertisement for sale, soliciting an order, and distribution
29 in any manner or by any means whatsoever, of motor fuel,
30 including a transfer of motor fuel by a person to that person,
31 to a member of that person, or to an affiliate.
32     "Supply point" or "terminal facility" means any inland,
33 waterfront, or offshore appurtenance on land used for the
34 purpose of storing, handling, or transferring motor fuel, but
35 does not include, wholesale bulk storage facilities owned or
36 operated by a retailer, unless other retailers are also

 

 

HB6556 - 22 - LRB093 19819 RXD 45562 b

1 supplied from such wholesale bulk storage facilities.
2     "Telecommunications expenses" means all communications
3 expenses incurred to accommodate the sale of motor fuel at
4 retail, including but not limited to, telephone line and use
5 expenses, Internet access fees, satellite service expenses,
6 cable fees, and other wire and wireless communications
7 expenses. In the event that goods and services, other than
8 motor fuel, are sold within the same facility as motor fuel, in
9 the event that the telecommunications expenses are shared to
10 accommodate sales and operations associated with the other
11 goods and services, and to the extent that the
12 telecommunications costs associated with motor fuel are not
13 separate and readily distinguishable from the
14 telecommunications costs associated with non-motor fuel sales
15 or operational activities, then the portion of costs not made
16 separate and readily distinguishable that should be allocated
17 as telecommunications expenses for the facility shall be
18 determined mathematically as follows: total telecommunications
19 costs for the facility multiplied by the total motor fuel sales
20 dollars at the facility, divided by the total sales dollars of
21 all products and services (motor fuels sales and non-motor fuel
22 sales at the facility).
23     "Transportation charges" shall be defined as the rate per
24 gallon not to exceed 1.10 times the average computed
25 independent commercial posted tariff (common carrier) rates
26 for delivery of motor fuel, from the relevant supply point to
27 the relevant destination point, as a single account, in effect
28 at time of delivery, based on the rates of at least 2 eligible
29 carriers.
30     "Utilities expenses" means all electrical, water, sewer,
31 natural gas, fuel oil, propane, and other energy and utilities
32 expenses incurred in the sale of motor fuel at retail. In the
33 event that goods and services, other than motor fuel, are sold
34 within the same facility as motor fuel, in the event that the
35 utilities expenses are shared to accommodate sales and
36 operations associated with the other goods and services, and to

 

 

HB6556 - 23 - LRB093 19819 RXD 45562 b

1 the extent that the utilities expenses associated with motor
2 fuel are not separate and readily distinguishable from the
3 utilities costs associated with non-motor fuel sales or
4 operational activities, then the portion of costs not made
5 separate and readily distinguishable that should be allocated
6 as motor fuel related utilities costs shall be determined
7 mathematically as follows: total utilities costs at the retail
8 facility multiplied by the total motor fuel sales dollars at
9 the retail facility, divided by the total sales dollars of all
10 products and services (motor fuels sales and non-motor fuel
11 sales at the retail facility).
12     "Wholesaler" means a person engaged in the business of
13 making sales of motor fuel at wholesale to a reseller of motor
14 fuel.
 
15     Section 15. Illegal motor fuel price gouging.
16     (a) It is a violation of this Act to engage in motor fuel
17 price gouging in response to the occurrence of a national
18 disaster or State emergency, except where the sale is both an
19 isolated and inadvertent incident.
20     (b) Motor fuel price gouging that occurs within the 7 days
21 immediately following the occurrence of a disaster or emergency
22 is rebuttably presumed to have been in response to the
23 occurrence of the disaster or emergency.
 
24     Section 20. Illegal sale below cost. It is a violation of
25 this Act to sell or advertise for sale motor fuel at a retail
26 price that would constitute a below cost sale, except:
27     (a) In response to the equally low price of a competitor
28 within the market area (except during regulated periods for
29 price restoration), provided that detailed records are kept
30 indicating the date and time of day of each change in the sale
31 price of motor fuel and the identity of the person who recorded
32 the price change, and if the change in price is to meet a lower
33 price of one or more competitors, the records shall set forth
34 the name and address of each such competitor, specifying the

 

 

HB6556 - 24 - LRB093 19819 RXD 45562 b

1 price which was met, and further documenting the price of each
2 such competitor each day that the price remains below cost, to
3 show that the retailer was responding to the equally low prices
4 of one or more competitors as a "follower", not a leader in the
5 below cost selling, and that the retailer made efforts to
6 support restoration of pricing to a level at or above cost when
7 one or more other competing retailers made such effort;
8     (b) During a publicized grand opening to introduce a new or
9 remodeled business not to exceed 72 consecutive hours in length
10 once every 3 years;
11     (c) During a bona fide clearance sale or final business
12 liquidation sale, not exceeding one week in length, for the
13 purpose of discontinuing trade in such motor fuel. (This
14 exception shall not be considered as the price of a competitor
15 and shall not be used as a basis for establishing a below cost
16 sale by another retailer);
17     (d) During a sale of motor fuel by a fiduciary or other
18 officer under the order or direction of any court from a good
19 faith effort to dispose of a grade, brand, or blend of motor
20 fuel. (This exception shall not be considered as the price of a
21 competitor and shall not be used as a basis for establishing a
22 below cost sale by another retailer);
23     (e) Where motor fuel is advertised, offered for sale, or
24 sold as imperfect or damaged, and the advertising, offer for
25 sale, or sale shall state the reason and the quantity of such
26 motor fuel advertised, offered for sale, or to be sold; or
27     (f) Where such sale is both an isolated and inadvertent
28 incident.
 
29     Section 25. Rebates, discounts, gifts, premiums,
30 promotional items, and concessions subtracted from price. The
31 payment or allowance of rebates, refunds, commissions,
32 discounts or concessions of any kind, in connection with the
33 sale of motor fuel, whether in the form of money, coupons,
34 discounts, or the value of items, articles, premiums, or
35 commodities gifted or price-subsidized in connection with the

 

 

HB6556 - 25 - LRB093 19819 RXD 45562 b

1 sale of motor fuel, shall, be mathematically subtracted from
2 the retail fuel price, whether or not such are actually
3 subtracted from the retail fuel price at the time of the sale,
4 and whether or not such are offered or given by the retailer or
5 any other person, to determine whether a retailer is selling
6 below costs.
 
7     Section 30. Establishment of Motor Fuel Cost Review Board.
8     (a) A Motor Fuel Cost Review Board shall be established to
9 consider matters brought before the Board relating to issues of
10 motor fuel price gouging and below-cost selling.
11     (b) The Board shall be comprised of 5 members, including:
12         (1) the Director of Revenue or his or her designated
13     representative;
14         (2) a resident of Illinois who is an active retailer of
15     motor fuel and a member in good standing with the Illinois
16     Petroleum Marketers Association;
17         (3) an Illinois resident who is a member in good
18     standing with the Illinois Retail Merchants Association;
19         (4) a certified managerial accountant licensed to
20     practice public accounting in the State; and
21         (5) a resident of the State, retired from the petroleum
22     retailing industry, having had a minimum of 10 years
23     experience working in the retail motor fuel industry before
24     retiring.
25     (c) Appointments to the Board shall be by the Governor,
26 with the advice and consent of at least a majority of the
27 Illinois Senate. Appointments shall be for a term of 3 years.
28     (d) The Board shall meet and be under the direction of the
29 Director of Revenue, or his or her designated representative,
30 who shall serve as chairperson of the Board. The Board shall
31 meet, at minimum one time a year and at maximum 5 times a year,
32 at which time the members of the Board shall receive an annual
33 report from the Director of Revenue or his or her designated
34 representative, about complaints and matters relating to price
35 gouging and below cost selling and the activities of the

 

 

HB6556 - 26 - LRB093 19819 RXD 45562 b

1 Department.
2     (e) The certified managerial accountant shall be
3 compensated at a rate that is usual and customary for
4 professional services provided by a certified managerial
5 accountant in the State, while other non-government employee
6 members of the Board shall be compensated at the rate $40 per
7 hour (such hourly rate to be increased every 3 years by a
8 factor based on one-half the rate of increase in the consumer
9 price index over the prior 3-year period) for time spent in
10 meetings of the Board, whether meetings be conducted in person
11 or by telephone conference call, with a minimum compensation
12 payment of $100 per person per meeting, such minimum to help
13 offset some of the outside preparation time and considerations
14 involved prior to meetings of short duration. While members of
15 the Board shall not be compensated for the time traveling to
16 and from meetings, members of the Board shall be reimbursed for
17 reasonable travel and lodging expenses upon request, the rates
18 of reimbursement for such expenses to not exceed those allowed
19 of State employees. Payments relating to this Section shall be
20 made by the Department.
 
21     Section 35. Remedies and penalties for below-cost sales.
22     (a) If a retailer is selling motor fuel in a given market
23 area below the regulated minimum retail cost price of motor
24 fuel sold for another retailer in the same market, the
25 complaining retailer may file a complaint with the Department
26 of Revenue. The complaint shall include, at minimum, the name,
27 contact person, address and telephone number of the complaining
28 retailer, and the name, address and telephone number of the
29 competing retailer (also referred to as "alleged violator"),
30 the name and address of each retail location subject to the
31 complaint, the pricing at each such location on the applicable
32 dates, the regulated minimum price of the complaining retailer
33 for each applicable date, with documentation supporting the
34 complaining retailer's computed regulated minimum price for
35 each such date. Within 30 days after receipt of the complaint,

 

 

HB6556 - 27 - LRB093 19819 RXD 45562 b

1 the Department shall give written notice of the complaint to
2 the alleged violator. Such notice shall include a copy of the
3 complaint and all documentation filed. The alleged violator
4 shall have 60 days from the date of the notice to respond to
5 the Department with evidence that the alleged violator, for any
6 and all periods of time subject to the complaint, and for any
7 and all periods of time following the last date named in the
8 complaint to the date of the notice, was not selling below its
9 regulated minimum price, or that any sale below the regulated
10 minimum price meets one of the exceptions of Section 20(a)
11 through (f). The Department shall have 90 days from the date of
12 the Department's receipt of the alleged violator's response to
13 provide to the complainant and to the alleged violator written
14 findings of: (i) whether the complaining retailer has made a
15 prima facie showing in its complaint that the alleged violator
16 sold below the complaining retailer's regulated minimum price,
17 and, if such prima facie showing is made, then (ii), whether
18 the alleged violator has proven in its response, by a
19 preponderance of the evidence, that it did not sell below its
20 regulated minimum price, or that it meets one of the Section 20
21 exceptions.
22     (b) If the Department finds: (i) that the complainant has
23 failed to make a prima facie showing under subsection (a), (ii)
24 that the alleged violator has proven either a Section 20
25 exception, or (iii) that it did not sell below its regulated
26 minimum price, the complaint shall be closed. If the Department
27 finds that the complainant has made the required prima facie
28 showing and that the alleged violator has neither rebutted that
29 showing nor proven a Section 20 exception, the alleged violator
30 shall be given the opportunity to provide full disclosure and
31 cost-accounting documentation that it did not sell below cost.
32 Certified by either a certified managerial accountant or
33 certified public accountant hired by the alleged violator, the
34 alleged violator shall file such documentation with the
35 Department within ninety 90 days after the date of the
36 Department's written findings under subsection (a), and shall,

 

 

HB6556 - 28 - LRB093 19819 RXD 45562 b

1 on the same day, serve the complainant with a copy. The
2 Department shall then have a period of 180 days in which to
3 review the data provided by the alleged violator, during which
4 time the Department may, at its option, submit the matter to
5 the Motor Fuel Cost Review Board for advisory comment. At any
6 time during this 180-day period, the Department may request
7 further data and clarification from the alleged violator, and
8 the alleged violator shall have a period of 60 days after each
9 additional request in which to respond with service of a copy
10 of each additional response upon the complainant. After the
11 final response, the Department shall have an additional period
12 of 180 days in which to review the supplemental data. If the
13 Department finds that the documentation provided by the alleged
14 violator proves by a preponderance of the evidence that it did
15 not sell below cost, then the complaint shall be closed. If the
16 Department shall find otherwise, or if the alleged violator
17 shall fail to provide data and documentation to support that it
18 did not sell below cost, the Department shall conclude that the
19 alleged violator violated this Act. The Department shall
20 promptly provide written notice to the alleged violator and the
21 complainant of the Department's conclusion, and fine the
22 violator in accordance with this Act.
23     (c) If the alleged violator fails or refuses to respond in
24 a timely manner to the requests of the Department or fails to
25 pay fines to the Department within 30 days after notice of the
26 imposition of a fine, the Department shall refer the matter to
27 the Office of the Illinois Attorney General for prosecution.
28 Upon receipt of such referral, the Office of the Illinois
29 Attorney General, or at its discretion, the State's Attorney
30 for the county in which the alleged below-cost sale occurred,
31 shall commence a civil action to enforce the findings of and
32 fines imposed by the Department. While the civil action is
33 pending, the Attorney General or the State's Attorney shall
34 seek to enjoin the violator from below cost pricing, and upon a
35 proper showing, a temporary restraining order, preliminary
36 injunction, or permanent injunction shall be issued without the

 

 

HB6556 - 29 - LRB093 19819 RXD 45562 b

1 necessity of a bond.
2     (d) Any person who has been found by the Department to have
3 committed a violation of below-cost selling under this Act
4 shall be listed as a "below cost seller" by the Department. If
5 such person is found to have committed another act of below
6 cost selling within 18 months after the date of the first act
7 of below-cost selling, the Department shall fine the violator a
8 sum not to exceed $5,000 per violation, unless a violation was
9 determined accidental, in which case the civil penalty shall
10 not exceed $2,500. The violator shall also be liable for
11 accountant's fees, expert witness fees, and investigative
12 expenses incurred by the Department, and shall be subject to
13 injunctive relief. Each day that a violation of below-cost
14 selling under this Act occurs is considered a separate
15 violation. If an action is brought by a State's Attorney, the
16 entire amount of the fine shall be paid to the treasury of the
17 county in which the judgment was entered. If such action is
18 brought by the Attorney General, one-half of the penalty shall
19 be paid to the treasury of the county where the action was
20 brought and one-half shall be paid to the State Treasury,
21 earmarked for the Attorney General's State Project and Court
22 Order Distribution Fund. Fines paid to the Department without
23 involvement of the Attorney General shall go to the General
24 Revenue Fund.
25     (e) Any person in competition with a person suspected of
26 below cost selling or threatening to sell below cost under this
27 Act may file and maintain an action in any court of competent
28 jurisdiction to prevent, restrain, or enjoin such violation or
29 threatened violation and recover damages for the violation or
30 threatened violation, whether or not such person has filed a
31 complaint under subsection (a) of Section 35 of this Act and
32 whether or not an action is pending under subsection (c) of
33 Section 35 of this Act. Upon proper application by the
34 plaintiff in any action under subsection (e) of Section 35, the
35 court shall grant preliminary injunctive relief if the
36 plaintiff shows that he or she is a proper person to seek the

 

 

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1 relief requested and that the defendant is selling motor fuel
2 below the plaintiff's regulated minimum price for the time in
3 question. In such action, there shall be a rebuttable
4 presumption that the defendant has violated this Act if the
5 plaintiff can show that, on a given day, the defendant sold or
6 offered for sale, motor fuel at a price below the plaintiff's
7 regulated minimum price. The defendant may rebut such
8 presumption by proving by a preponderance of the evidence that:
9 (i) the plaintiff's calculation of the regulated minimum price
10 was inaccurate and the defendant did not in fact sell below the
11 actual regulated minimum price; (ii) that the defendant
12 qualifies for one of the exceptions under Section 20; or (iii)
13 that the defendant did not in fact sell or offer for sale motor
14 fuel below cost. If the plaintiff proves a prima facie
15 violation of this Act, and the defendant does not rebut such
16 proof, the court shall enjoin and restrain, or otherwise
17 prohibit, such violation or threatened violation and, in
18 addition, the court shall assess in favor of the plaintiff and
19 against the defendant the costs of the lawsuit, including
20 reasonable attorney's fees. It shall not be necessary that
21 actual damages to the plaintiff be alleged or proved, but if
22 damages are alleged and proved, the plaintiff shall also be
23 entitled to actual damages, exemplary or punitive damages, and
24 restitution. If the plaintiff fails to make a prima facie
25 showing that the defendant sold motor fuel below the
26 plaintiff's regulated minimum price, or if the defendant proves
27 that the plaintiff's calculation of plaintiff's regulated
28 minimum price was inaccurate, the court may award court costs
29 and reasonable attorney's fees to the defendant.
30     (f) The circuit courts of this State are empowered with
31 jurisdiction to hear and determine all cases brought under this
32 Section. Venue lies in the county in which the alleged
33 violation occurred.
34     (g) If any action is brought for a violation of a
35 below-cost sale, the burden of proof, upon a prima facie
36 showing of a violation, shall shift to the defendant to show

 

 

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1 justification. A prima facie showing of a violation shall be
2 made if the plaintiff shows that the retail price of motor fuel
3 of the defendant-retailer was below the regulated minimum
4 retail cost price of motor fuel sold of the plaintiff retailer.
5 Unless justification is shown by the defendant by a
6 preponderance of the evidence, the court shall award judgment
7 to the plaintiff.
 
8     Section 40. Remedies and penalties for price gouging.
9     (a) Complaints of price gouging shall be made to the
10 Department of Revenue, specifying the name and address of each
11 retail location subject to the complaint, and the pricing at
12 each location on applicable dates that the violations are
13 alleged to have occurred. Within 30 days of receipt of the
14 complaint, the Department shall make contact with the alleged
15 violator, and the alleged violator shall have 60 days after
16 receipt of notice in which to provide evidence that for any and
17 all periods of time subject to the complaint, and for any and
18 all periods of time from the date of the last violation alleged
19 in the complaint to the date of the notice, the alleged
20 violator was not price gouging. Upon a prima facie showing that
21 the alleged violator sold or offered for sale motor fuel at a
22 price above the regulated maximum price on the date in
23 question, the alleged violator shall have the burden to prove,
24 by a preponderance of the evidence that he or she did not
25 engage in price gouging. If the alleged violator can show, by a
26 preponderance of the evidence, that he or she did not engage in
27 price gouging, the complaint shall be closed. If the Department
28 shall find that the alleged violator did not prove that he or
29 she did not engage in price gouging for each day subject to the
30 complaint, the alleged violator shall be given the opportunity
31 to provide full disclosure and cost-accounting documentation,
32 certified by either a certified managerial accountant or
33 certified public accountant hired by the alleged violator, that
34 it did not engage in price gouging. The Department shall then
35 have a period of 180 days in which to review the data provided

 

 

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1 by the alleged violator, during which time, the Department may,
2 at its option, submit the matter to the Motor Fuel Cost Review
3 Board, for advisory comment. At any time during this 180-day
4 period, the Department may request further data and
5 clarification from the alleged violator, and the alleged
6 violator shall have a period of 60 days, after each such
7 request, in which to respond. After receipt of the final
8 response, the Department shall have an additional period of 180
9 days in which to review the supplemental data. If the
10 Department finds that the documentation provided by the alleged
11 violator proves by a preponderance of the evidence that he or
12 she did not engage in price gouging, then the complaint shall
13 be closed. If the Department shall find otherwise, or if the
14 alleged violator shall fail to provide data and documentation
15 to support that he or she did not engage in price gouging, the
16 Department shall conclude that the alleged violator violated
17 this Act. The Department shall then notify the alleged violator
18 of the Department's conclusion, and fine the violator in
19 accordance with this Act.
20     (b) If the alleged violator fails or refuses to respond in
21 a timely manner to the requests of the Department or fails to
22 pay fines to the Department within 30 days after notice of the
23 imposition of the fine, the Department shall refer the matter
24 to the Attorney General for prosecution. Upon receipt of such
25 referral, the Attorney General, or at its discretion, the
26 State's Attorney of the county in which the violation occurred,
27 shall commence a civil action to enforce the findings of and
28 fines imposed by the Department. While the civil action is
29 pending, the Attorney General shall seek to enjoin the violator
30 from price gouging, and upon a proper showing, a temporary
31 restraining order, preliminary injunction, or permanent
32 injunction shall be issued without the necessity of a bond.
33     (c) Any person who is found to have committed a violation
34 of price gouging, as defined by this Act, shall be subject to a
35 civil penalty not to exceed $5,000 per violation for each
36 offense. Any such violator shall also be liable for the fees of

 

 

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1 accountants, expert witness fees, and investigative expenses,
2 incurred by the State, if the State prevails in an action under
3 this Act. Each day that a violation of price gouging under this
4 Act occurs is considered a separate violation. If brought by a
5 State's Attorney, the entire amount of the fine shall be paid
6 to the treasury of the county in which the judgment was
7 entered. If brought by the Attorney General, one-half of the
8 penalty shall be paid to the treasury of the county where the
9 action was brought and one-half shall be paid to the State
10 Treasury, earmarked for the Attorney General's State Project
11 and Court Order Distribution Fund. Fines paid to the Department
12 without involvement of the Attorney General shall go to the
13 General Revenue Fund.
 
14     Section 45. Illegal contracts. Any contract, express or
15 implied, made by any person in violation of any of the
16 provisions of this Act is illegal and void, and recovery shall
17 not be awarded.
 
18     Section 50. Recordkeeping.
19     (a) Persons engaged in commerce within this State who sell
20 or offer to sell motor fuel shall maintain records accurately
21 indicating the date and the time of day of each change in the
22 sale price of motor fuel and the identity of the person who
23 recorded the price change. In the event the change in price is
24 to meet a lower price of a competitor, the record shall set
25 forth the competitor's name and address, specifying the price
26 which was met. These records shall be maintained for a period
27 of 3 years.
28     (b) The records shall be made available to the Department
29 of Revenue and Attorney General on request.
 
30     Section 55. Witnesses; production of books and records. Any
31 defendant, or any witness, in any civil action brought under
32 the provisions of this Act may be required to testify, and any
33 defendant, or any witness, may, upon proper process, be

 

 

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1 compelled to produce his books, records, invoices, and all
2 other documents of any such defendant or witness into court and
3 the same may be introduced as evidence, but no testimony given
4 or produced shall be received against such defendant upon any
5 criminal proceeding or investigation against the defendant.
 
6     Section 60. Trade association may file suit. Any duly
7 organized and existing trade association, whether incorporated
8 or not, is authorized to institute and prosecute a suit or
9 suits for injunctive relief and costs provided for under the
10 terms of this Act, as the real party in interest for and on
11 behalf of one or more of the association's members, when a
12 violation of this Act directly or indirectly affects or
13 threatens to affect or injure such member or members, or where
14 violation of this Act threatens to impair fair competition or
15 otherwise affects the member.
 
16     Section 65. Limitations period. Any action brought by the
17 Attorney General or any State's Attorney shall be brought
18 within 2 years after the alleged violation occurred or should
19 reasonably have been discovered. Any action brought by any
20 other person or entity shall be brought within 3 years after
21 the alleged violation occurred or should reasonably have been
22 discovered.
 
23     Section 70. Powers and duties.
24     (a) The Department of Revenue has the following powers and
25 duties:
26         (1) to investigate complaints regarding violations of
27     this Act;
28         (2) to seek injunctive relief as appropriate;
29         (3) to levy fines for a violation of this Act;
30         (4) to determine what rates of compensation are usual
31     and customary for certified managerial or cost accountants
32     practicing in the State, and to set the hourly fee of the
33     managerial or cost-accountant serving on the Motor Fuel

 

 

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1     Cost Review Board.
2     (b) The Attorney General has the following powers and
3     duties:
4         (1) to investigate complaints regarding violations of
5     this Act;
6         (2) to seek injunctive relief as appropriate;
7         (3) to seek restitution for victims of motor fuel price
8     gouging and other violations of this Act;
9         (4) to institute an action to collect a civil penalty
10     for a violation of this Act; and
11         (5) to delegate to any appropriate State's Attorney its
12     powers and duties.
 
13     Section 75. Confidentiality.
14     (a) Information obtained by the Department, Attorney
15 General, or State's Attorney in the course of an investigation
16 under this Act, including information from a person who
17 responds to the investigation and designates the information as
18 confidential, must be maintained as confidential until the
19 investigation is completed and a course of action is
20 determined. Neither the Department, Attorney General, or
21 State's Attorney may make known in any manner information
22 obtained in the course of the investigation to persons other
23 that those specified in subsection (c) of this Section or the
24 members of the Motor Fuel Cost Review Board. Once the
25 investigation is completed, if there is a settlement or if a
26 civil action is filed, the information may be made public.
27     (b) This Section does not prohibit the use of confidential
28 information to prepare statistics of other general data for
29 publication, if the information is presented in a manner that
30 prevents identification of particular persons or locations
31 under investigation.
32     (c) For purposes of this Section, references to the
33 Department, Attorney General, or State's Attorney include
34 other individuals designated to write and act on their behalf
35 during an investigation. A person designated shall preserve the

 

 

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1 confidentiality of information as provided for in subsection
2 (a).
3     (d) A person who is served with a request for information,
4 a subpoena to give testimony orally or in writing, or to
5 produce books, papers, correspondence, memoranda, agreements,
6 or other documents or records under this Act may apply to the
7 appropriate circuit court for protection against abuse or undue
8 hardship.
 
9     Section 80. Banning of government subsidies for motor fuel
10 marketers.
11     (a) It is the policy of this State that no development
12 containing a facility for selling motor fuel shall receive any
13 government subsidy, State or local, to aid in the cost of
14 development, when the motor fuel facility being developed would
15 be in competition with another Illinois-based facility within
16 the same market area.
17     (b) For any facility that has been built with any
18 government subsidy, before a motor fuel facility shall be added
19 to, about, or in affiliation with such facility, all government
20 subsidies received before, shall be paid back to each
21 governmental body providing such subsidy.
22     (c) Any competitor of a person suspected of receiving a
23 government subsidy in violation of this Act shall have standing
24 to prosecute a civil action to enjoin a violation of this
25 Section and to compel restitution of any such subsidy received
26 or government monies foregone in violation of this Section.
 
27     Section 85. Severability. If any provision of this Act or
28 its application to any person or circumstance is held invalid,
29 the invalidity of that provision or application does not affect
30 other provisions or applications of this Act that can be given
31 effect without the invalid provision or application.
 
32     Section 90. Rulemaking authority and duty to inform. The
33 Department of Revenue may issue rules to administer and enforce

 

 

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1 this Act. The Department shall also have the duty to inform
2 motor fuel marketers of this Act, including the requirements to
3 not sell below cost and to not engage in price gouging, though
4 failure to receive such notice shall not be a defense under
5 this Act. This duty shall be performed by the following: (1)
6 between the time that the Act is signed into law and its
7 effective date, the Department of Revenue shall issue written
8 notification to all persons who are currently filing motor fuel
9 tax returns, as well as all persons listed on prepaid sales tax
10 forms as being retailers from whom prepaid sales taxes have
11 been collected on motor fuels, informing them of this Act, and
12 the requirements to not sell below cost and to not engage in
13 price gouging as defined in this Act, (2) within one year of
14 the effective date of this Act, the Department shall have
15 revised and issued forms requiring filers of motor fuel tax
16 returns to certify their awareness of the Motor Fuel Fair
17 Marketing Practices Act, including the requirements to not sell
18 below cost and to not engage in price gouging, and (3) at the
19 time that new motor fuel licenses are issued, the Department
20 shall include a notice of the existence of this Act, such
21 notice including the requirements to not sell below cost and to
22 not engage in price gouging.
 
23     Section 95. Appropriations. The Department of Revenue and
24 Office of the Illinois Attorney General shall request, and the
25 General Assembly shall reasonably fund from the General Revenue
26 Fund, by way of appropriations, the costs and expenses
27 necessary to comply with this Act.